better together we deliver - Sasol · Uzbekistan GTL LLC 44,5 Proportionately consolidated Equity...

better together... we deliver

Impact of adopting new consolidation suite of accounting standards - restatement of previously reported financial results

better together… we deliver 1

Dear stakeholder, On 1 July 2013, Sasol adopted a number of new International Financial Reporting Standards (IFRS), which impacted the previously reported financial results of the group. These new accounting standards include IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements and IFRS 12, Disclosure of Interests in Other Entities. In accordance with the transition provisions, these standards have been applied with retrospective effect resulting in a restatement of the previously reported financial results. As part of our commitment to keep our stakeholders informed, this document provides information on the restated comparative reporting periods that will be disclosed alongside the group’s results for the six months ended 31 December 2013. This information is preliminary and has not been audited or reviewed by the Company’s auditors. Yours sincerely, Paul Victor Acting Chief Financial Officer 28 February 2014 Johannesburg


Table of Contents

1. Overview of reporting changes 3 IFRS 10, Consolidated Financial Statements 3 IFRS 11, Joint Arrangements 3 IFRS 12, Disclosure of Interests in Other Entities 4

2. Impact of new accounting standards on the group results 5 Restated comparatives - 31 December 2012 5 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2012 5

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2012 6

SALIENT FEATURES FOR THE PERIOD ENDED 31 DECEMBER 2012 6

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 31

DECEMBER 2012 7

Restated comparatives - 30 June 2013 8 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2013 8

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2013 9

SALIENT FEATURES FOR THE YEAR ENDED 30 JUNE 2013 9

Restated comparatives - 30 June 2012 10 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2012 10

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 11

SALIENT FEATURES FOR THE YEAR ENDED 30 JUNE 2012 11

3. Other elements of the financial statements 12

4. Investor Relations contacts 12 5. Supplementary information 14


1. Overview of reporting changes

The consolidation suite of standards, namely IFRS 10, Consolidated Financial Statements (IFRS 10), IFRS 11, Joint Arrangements (IFRS 11) and IFRS 12, Disclosure of Interests in Other Entities (IFRS 12) became effective for annual periods beginning on or after 1 January 2013. Accordingly, Sasol adopted these new accounting standards on 1 July 2013 which resulted in a restatement of the group’s previously reported results for the years ended 30 June 2013 and 2012 and the six months ended 31 December 2012.

IFRS 10, Consolidated Financial Statements

IFRS 10 replaces IAS 27, Consolidated and Separate Financial Statements, that addresses the accounting for consolidated financial statements and SIC-12, Consolidation – Special Purpose Entities.

This standard provides a single basis for consolidation with new criteria to determine whether entities, in which the group has an interest should be consolidated.

The adoption of IFRS 10 has resulted in an existing subsidiary, National Petroleum Refiners of South Africa (Pty) Ltd (Natref), in which the group has a 64% interest, being accounted for as a joint operation using the line-by-line consolidation method.

No other material subsidiaries within the group were affected.

The group has applied IFRS 10 retrospectively in accordance with the transition provisions and the results for the years ended 30 June 2013 and 2012 and the six months ended 31 December 2012 has been restated accordingly.

IFRS 11, Joint Arrangements

IFRS 11 replaces IAS 31, Interests in Joint Ventures, and SIC-13, Jointly-controlled Entities – Non-monetary Contributions by Venturers and changes the classification for joint arrangements.

Under IFRS 11, a joint arrangement is classified as either a joint operation or a joint venture based on the rights and obligations of the parties to the arrangement, the legal form of the joint arrangement and when relevant, other facts and circumstances.

IFRS 11 removes the option to proportionately consolidate joint ventures and instead, all interests in joint arrangements that meet the definition of a joint venture under IFRS 11 must be accounted for using the equity method.


The adoption of IFRS 11 has resulted in the following changes: Sasol’s

interest Previous

classification Revised

classification

ORYX GTL Limited 49 Proportionately consolidated

Equity accounted

Sasol-Huntsman GmbH & co KG 50 Proportionately consolidated

Equity accounted

Petlin (Malaysia) Sdn. Bhd 40 Proportionately consolidated

Equity accounted

Uzbekistan GTL LLC 44,5 Proportionately consolidated

Equity accounted

Arya Sasol Polymer Company (ASPC) 1 50 Proportionately consolidated

Equity accounted

Merisol LP 2 50 Proportionately consolidated

Equity accounted

1 The group disposed of its investment in Arya Sasol Polymer Company in August 2013. The comparative periods for the years ended 30 June 2013 and 2012 and the six months ended 31 December 2012 have been restated in accordance with IFRS 11 to include this investment as an equity accounted joint venture. 2 In December 2012, Sasol acquired the remaining 50% shareholding in Merisol. Accordingly, this investment was accounted for as a 100% subsidiary from 31 December 2012.

All other joint arrangements (including Sasol Canada and Natref), will continue to be accounted for using the line-by-line consolidation method.

IFRS 12, Disclosure of Interests in Other Entities

IFRS 12 sets out the requirements for disclosures relating to an entity’s interest in subsidiaries, joint arrangements, associates and structured entities. These disclosures will be provided in the group’s annual financial statements for the year ending 30 June 2014.


2. Impact of new accounting standards on the group results

The impact of adopting IFRS 10 and IFRS 11 on the group results for the comparative periods is indicated in the tables to follow:

Restated comparatives - 31 December 2012

Condensed consolidated statement of financial position at 31 December 2012

As previously reported

R’m

Effect of adoptingIFRS 10 and IFRS 11

R’m Restated

R’m

ASSETS

Property, plant and equipment 99 149 (8 637) 90 512

Assets under construction 38 452 (761) 37 691

Investments in equity accounted joint ventures - 8 502 8 502

Investments in associates 2 487 14 2 501

Other long-term assets 6 306 (270) 6 036

Non-current assets 146 394 (1 152) 145 242

Inventories 24 069 (1 716) 22 353

Trade and other receivables 26 128 (918) 25 210

Cash 28 147 (2 238) 25 909

Other current assets 864 31 895

Current assets 79 208 (4 841) 74 367

Total assets 225 602 (5 993) 219 609

EQUITY AND LIABILITIES

Shareholders' equity 132 428 (38) 132 390

Non-controlling interests 3 294 (338) 2 956

Total equity 135 722 (376) 135 346

Long-term debt 21 402 (1 626) 19 776

Long-term provisions 10 991 (235) 10 756

Other non-current liabilities 23 135 (694) 22 441

Non-current liabilities 55 528 (2 555) 52 973

Trade payables and accrued expenses 24 245 (1 707) 22 538

Other current liabilities 10 107 (1 355) 8 752

Current liabilities 34 352 (3 062) 31 290

Total equity and liabilities 225 602 (5 993) 219 609


Consolidated income statement for the period ended 31 December 2012


R’m


R’m Restated

R’m

Turnover 85 440 (5 590) 79 850

Materials, energy and consumables used (37 001) 468 (36 533)

Selling and distribution costs (2 479) 131 (2 348)

Maintenance expenditure (4 427) 729 (3 698)

Employee related expenditure (9 915) 503 (9 412)

Exploration expenditure and feasibility costs (777) (4) (781)

Depreciation and amortisation (5 445) 431 (5 014)

Other expenses, net (3 841) 715 (3 126)

Translation gains / (losses) (299) 982 683

Other operating expenses (4 151) (128) (4 279)

Other operating income 609 (139) 470

Operating profit before remeasurement items 21 555 (2 617) 18 938

Remeasurement items (2 621) 1 963 (658)

Operating profit after remeasurement items 18 934 (654) 18 280

Share of profits of equity accounted joint ventures, net of tax - 592 592

Share of profits of associates, net of tax 204 - 204

Profit from operations, associates and joint ventures 19 138 (62) 19 076

Net finance income (654) 93 (561)

Profit before tax 18 484 31 18 515

Taxation (5 876) (63) (5 939)

Profit for the period 12 608 (32) 12 576

Attributable to

Owners of Sasol Limited 12 157 - 12 157

Non-controlling interests in subsidiaries 451 (32) 419

12 608 (32) 12 576

Salient features for the period ended 31 December 2012

As previously

reported

Effect of adopting IFRS 10 and IFRS 11

Restated

Operating profit margin % 22,2 0,7 22,9

Return on equity % 19,3 (0,1) 19,2

Return on total assets % 18,6 0,3 18,9

Gearing % 6,6 (2,2) 4,4

Capital commitments R’m 64 299 (609) 63 690


Condensed consolidated statement of cash flow for the period ended 31 December 2012

As previously

reported R’m


R’m Restated

R’m Cash generated by operating activities 21 435 (2 716) 18 719

Net finance income received / paid 154 1 910 2 064

Tax paid (4 745) 40 (4 705)

Dividends paid (7 267) - (7 267)

Cash retained from operating activities 9 577 (766) 8 811

Additions to non-current assets (14 350) 533 (13 817)

Acquisition of new or additional interests in joint ventures (721) (361) (1 082)

Acquisition of new or additional investments in associates (199) - (199)

Other net cash flows from investing activities 906 (43) 863

Cash utilised in investing activities (14 364) 129 (14 235)

Share capital issued on implementation of share options 227 - 227

Contributions from non-controlling shareholders in subsidiaries 27 - 27

Dividends paid to non-controlling shareholders in subsidiaries (248) 28 (220)

Net movement in long-term debt 7 522 269 7 791

Net movement in short-term debt 6 513 - 6 513

Cash effect of financing activities 14 041 297 14 338

Translation effects on cash and cash equivalents of foreign operations 249 (57) 192

Increase in cash and cash equivalents 9 503 (397) 9 106

Cash and cash equivalents at beginning of the period 17 838 (1 841) 15 997

Net reclassification to held for sale (29) - (29)

Cash and cash equivalents at end of the period 27 312 (2 238) 25 074


Restated comparatives - 30 June 2013

Condensed consolidated statement of financial position at 30 June 2013


R’m


R’m Restated

R’m

ASSETS


Assets under construction 41 244 (1 379) 39 865



Other long-term assets 7 903 22 7 925

Non-current assets 159 893 210 160 103

Inventories 24 056 (1 437) 22 619


Cash 32 713 (1 410) 31 303

Other current assets 3 830 (30) 3 800

Current assets 89 602 (3 540) 86 062

Total assets 249 495 (3 330) 246 165




Total equity 153 275 (382) 152 893

Long-term debt 22 357 (1 017) 21 340




Trade payables and accrued expenses 33 477 (985) 32 492

Other current liabilities 2 648 (146) 2 502




Consolidated income statement for the year ended 30 June 2013


R’m


R’m Restated

R’m

Turnover 181 269 (11 378) 169 891

Materials, energy and consumables used (77 538) 921 (76 617)




Exploration expenditure and feasibility costs (1 354) (15) (1 369)


Other expenses, net (6 841) 2 607 (4 234)

Translation gains 899 1 993 2 892

Other operating expenses (9 692) 803 (8 889)

Other operating income 1 952 (189) 1 763


Remeasurement items (6 487) 3 538 (2 949)

Operating profit after remeasurement items 40 628 (1 849) 38 779

Share of profits of equity accounted joint ventures, net of tax - 1 562 1 562

Share of profits of associates, net of tax 445 59 504


Net finance costs (1 294) 155 (1 139)

Profit before tax 39 779 (73) 39 706

Taxation (12 597) 2 (12 595)

Profit for year 27 182 (71) 27 111

Attributable to

Owners of Sasol Limited 26 278 (4) 26 274


27 182 (71) 27 111

Salient features for the year ended 30 June 2013



Restated

Operating profit margin %

22,4 0,4 22,8

Return on equity %

19,1 - 19,1

Return on total assets %

18,4 0,3 18,7

Gearing %

(0,3) (0,8) (1,1)

Capital commitments R’m

67 752 (405) 67 347


Restated comparatives - 30 June 2012

Condensed consolidated statement of financial position at 30 June 2012


R’m


R’m Restated

R’m

ASSETS


Assets under construction 33 585 (473) 33 112



Other long-term assets 6 265 (337) 5 928

Non-current assets 138 282 (1 869) 136 413

Inventories 20 668 (1 748) 18 920


Cash 18 060 (1 897) 16 163

Other current assets 444 - 444

Current assets 65 471 (4 301) 61 170

Total assets 203 753 (6 170) 197 583




Total equity 128 314 (372) 127 942

Long-term debt 12 828 (1 239) 11 589




Trade payables and accrued expenses 27 460 (1 548) 25 912

Other current liabilities 3 429 (1 918) 1 511




Consolidated income statement for the year ended 30 June 2012


R’m


R’m Restated

R’m

Turnover 169 446 (10 332) 159 114

Materials, energy and consumables used (80 410) 1 699 (78 711)




Exploration expenditure and feasibility costs (1 045) 2 (1 043)


Other expenses, net (8 215) 1 164 (7 051)

Translation gains 243 496 739

Other operating expenses (9 874) 683 (9 191)

Other operating income 1 416 (15) 1 401


Remeasurement items (1 860) 83 (1 777)

Operating profit after remeasurement items 36 758 (5 009) 31 749

Share of profits of equity accounted joint ventures, net of tax - 4 545 4 545

Share of profits of associates, net of tax 479 (63) 416


Net finance costs (1 234) 227 (1 007)

Profit before tax 36 003 (300) 35 703

Taxation (11 746) 245 (11 501)

Profit for year 24 257 (55) 24 202

Attributable to

Owners of Sasol Limited 23 583 (2) 23 581


24 257 (55) 24 202

Salient features for the year ended 30 June 2012



Restated

Operating profit margin % 21,7 (1,7) 20,0

Return on equity % 20,3 - 20,3

Return on total assets % 20,0 0,2 20,2

Gearing % 2,7 (2,4) 0,3

Capital commitments R’m 45 819 (299) 45 520


3. Other elements of the financial statements

The adoption of IFRS 10 and IFRS 11 did not have a significant impact on the statement of changes in equity or the statement of comprehensive income for the years ended 30 June 2013 and 2012 and the six months ended 31 December 2012.

4. Investor Relations contacts

Please feel free to contact us as follows:

[email protected]

+27 11 441 3113

Sponsor: Deutsche Securities (SA) Proprietary Limited


Forward-looking statements: Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 9 October 2013 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.

Please note: A billion is defined as one thousand million. All references to years refer to the financial year ended 30 June. Any reference to a calendar year is prefaced by the word “calendar”


R’ million

As at 30 June 2013

ORYX GTL Sasol Huntsman

Petlin Uzbekistan ASPC1 Merisol2 Other Total equity accounted joint

ventures

Natref Sasol Canada Other Total joint operations

External non-current assets 5 095 945 550 344 - - 198 7 132 2 095 13 899 980 16 974

Property, plant and equipment 4 704 648 502 1 - - 87 5 942 1 976 7 170 226 9 372

Assets under construction 340 - 39 343 - - 9 731 118 6 668 542 7 328

Other non-current assets 51 297 9 - - - 102 459 1 61 212 274

External current assets 2 008 333 484 358 - - 270 3 453 329 2 822 1 449 4 600

Intercompany current assets - - - - - - - - 10 - 64 74

Total assets 7 103 1 278 1 034 702 - - 468 10 585 2 434 16 721 2 493 21 648

Shareholders’ equity 6 388 622 688 644 - - 294 8 636 207 15 659 1 861 17 727

Long-term debt 57 345 - - - - 3 405 1 191 1 215 1 407

Intercompany long-term debt - - - - - - - - - - 62 62

Long-term provisions 26 17 - - - - 86 129 70 260 - 330

Other non-current liabilities 194 145 32 - - - 11 382 441 - (5) 436

Current liabilities 438 149 314 58 - - 74 1 033 525 801 360 1 686

Total liabilities and equity 7 103 1 278 1 034 702 - - 468 10 585 2 434 16 721 2 493 21 648

Carrying value of investment 6 388 622 688 644 - - 294 8 636

Income statement

External turnover 4 790 705 1 213 - 4 134 401 (138) 11 105 479 600 401 1 480

Operating profit / (loss) 2 670 91 (62) (21) (1 323) 46 195 1 597 327 (1 919) 3 (1 589)

Attributable earnings / (loss) 2 656 49 (49) (20) (1 237) 41 (48) 1 392 113 (1 912) 44 (1 755)

1 The assets and liabilities of ASPC was classified as held for sale at 30 June 2013. 2 In December 2012, Sasol acquired the remaining 50% shareholding in Merisol. Accordingly, this investment was accounted for as a 100% subsidiary from 31 December 2012.

Supplementary information

Summarised results of the group’s joint arrangements - The following table contains a summary of the results of the group’s share in joint arrangements at 30 June 2013, based on the new IFRS 11 classifications


Effect of IFRS 10 and IFRS 11 on the group consolidated results for the year ended 30 June 2013

R’ million IFRS 11

adjustments IFRS 10

adjustments Consolidation adjustments 1

Total

External non-current assets 7 132 1 610 (316) 8 426

Property, plant and equipment 5 942 1 139 - 7 081

Assets under construction 731 648 - 1 379

Other non-current assets 459 (177) (316) (34)

Investments in equity accounted joint ventures (8 636) - - (8 636)

Current assets 3 453 202 (115) 3 540

Total assets 1 949 1 812 (431) 3 330

Shareholders’ equity - 362 20 382

Long-term debt 405 612 - 1 017

Long-term provisions 129 40 - 169

Other non-current liabilities 382 249 - 631

Current liabilities 1 033 549 (451) 1 131

Total liabilities and equity 1 949 1 812 (431) 3 330

Income statement

External turnover 11 105 273 - 11 378

Operating profit 1 597 191 61 1 849

1 Consolidation adjustments are in respect of transactions between group companies and equity accounted joint ventures that are accounted for as external transactions.

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